383 U.S.

225
86 S.Ct. 768
15 L.Ed.2d 717

Pasquale J. ACCARDI et al., Petitioners,

v.
The PENNSYLVANIA RAILROAD COMPANY.
No. 280.
Argued Jan. 20, 1966.
Decided Feb. 28, 1966.

Richard A. Posner, Asst. to Sol. Gen., Dept. of Justice, Washington, D.C.,

for petitioners, pro hac vice, by special leave of Court.
Edward F. Butler, New York City, for respondent.
Mr. Justice BLACK delivered the opinion of the Court.

Petitioners, who are World War II veterans and former employees of the
Pennsylvania Railroad, brought this action claiming that their former employer
denied them certain seniority rights guaranteed by 8 of the Selective Training
and Service Act of 1940.1 Section 8(b)(B) of that Act provides that upon
application by any former employee who has satisfactorily completed his
military service, a private employer 'shall restore' such honorably discharged
serviceman to his former 'position or to a position of like seniority, status, and
pay unless the employer's circumstances have so changed as to make it
impossible or unreasonable to do so.' Section 8(c) reemphasizes 8(b)(B) by
providing that any person so restored 'shall be so restored without loss of
seniority.'

The facts in this case are undisputed. In 1941 and 1942 the six petitioners began
working as firemen on tugboats owned by the Pennsylvania Railroad and
operated in the Port of New York. Petitioners left their jobs in 1942 and 1943 to
enter the armed services and after serving three years or more each received an
honorable discharge. Shortly after discharge each was restored by the railroad
to his former position as fireman with the same amount of seniority he had
before leaving plus credit for the time spent in the armed forces, as required by

the 1940 Act. All six continued to work for the railroad until 1960. In 1959 a
labor dispute broke out when the Pennsylvania and nine other railroad carriers
operating tugboats claimed that firemen were not necessary on the new diesel
tugs, and the owners of the tugs sought to abolish the craft and class of fireman.
The unions affected called a strike. This strike was settled in 1960 when
petitioners' union and the railroads entered an agreement which abolished the
position of fireman on all diesel tugs. As their part of the bargain the railroads
agreed to retain in their employ firemen with 20 years or more seniority who
desired to remain, but all firemen with less than 20 years seniority were
discharged. To make this settlement more acceptable to the employees, those
who were discharged or who did not desire to stay with the railroads were paid
a severance or separation allowance based on a formula set out in the
agreement. Each of the petitioners involved in this case left his job with the
Pennsylvania Railroad and received a separation allowance, but each received
less than he thought was due. This lawsuit was begun as an attempt to recover
what each believed was owed him by the railroad.
3

The amount of the separation allowances was determined, according to the

language of the agreement, by the length of 'compensated service' with the
railroad. A month of 'compensated service' was defined as any month in which
the employee worked one or more days and 'a year of compensated service is
12 such months or major portion thereof.' In computing petitioners' separation
allowances the railroad did not include the years spent in the armed forces as
years of 'compensated service.' Petitioners claim this was error and contrary to
8 of the Selective Training and Service Act of 1940. Each petitioner received
$1,242.60 less than he would have if given credit for the three or more years he
spent in military service and the parties have stipulated that if petitioners are
entitled to have the time in the service included in determining severance pay,
judgment for this amount should be rendered for each of them. The District
Court rendered judgment for petitioners. The Court of Appeals reversed,
holding, contrary to the District Court, that the petitioners were not entitled to
credit for their time in the service in computing the allowances because the
allowances did not come within the concepts of 'seniority, status, and pay.' 2
Cir., 341 F.2d 72.

The language of the 1940 Act clearly manifests a purpose and desire on the part
of Congress to provide as nearly as possible that persons called to serve their
country in the armed forces should, upon returning to work in civilian life,
resume their old employment without any loss because of their service to their
country. Section 8(b)(B) of the statute requires that private employers reinstate
their former employees who are honorably discharged veterans 'to (their
former) position or to a position of like seniority, status, and pay,' and 8(c)

provides that such a person 'shall be so restored without loss of seniority.' This
means that for the purpose of determining seniority the returning veteran is to
be treated as though he has been continuously employed during the period spent
in the armed forces. Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S.
275, 284285, 66 S.Ct. 1105, 11101111, 90 L.Ed. 1230. The continuing
purpose of Congress in this matter was again shown in the Universal Military
Training and Service Act, 62 Stat. 604, as amended, 50 U.S.C. App. 451 et
seq. (1964 ed.). Section 9(c)(2) of that Act provides:
5

'It is hereby declared to be the sense of the Congress that any person who is
restored to a position in accordance with the provisions of paragraph (A) or (B)
of subsection (b) (of this section) should be so restored in such manner as to
give him such status in his employment as he would have enjoyed if he had
continued in such employment continuously from the time of his entering the
armed forces until the time of his restoration to such employment.'

Respondent railroad does not quarrel with this interpretation of the statute but
insists that the severance pay involved here was not based on seniority and that
8(b)(B) and (c) are wholly inapplicable to this case.

The term 'seniority' is nowhere defined in the Act, but it derives its content
from private employment practices and agreements. This does not mean,
however, that employers and unions are empowered by the use of transparent
labels and definitions to deprive a veteran of substantial rights guaranteed by
the Act. As we said in Fishgold v. Sullivan Drydock & Repair Corp., supra,
'(N)o practice of employers or agreements between employers and unions can
cut down the service adjustment benefits which Congress has secured the
veteran under the Act.' At 285, 66 S.Ct. at 1111. The term 'seniority' is not to be
limited by a narrow, technical definition but must be given a meaning that is
consonant with the intention of Congress as expressed in the 1940 Act. That
intention was to preserve for the returning veterans the rights and benefits
which would have automatically accrued to them had they remained in private
employment rather than responding to the call of their country. In this case
there can be no doubt that the amounts of the severance payments were based
primarily on the employees' length of service with the railroad. The railroad
contends, however, that the allowances were not based on seniority, but on the
actual total service rendered by the employee. This is hardly consistent with the
bizarre results possible under the definition of 'compensated service.' As the
Government2 points out, it is possible under the agreement for an employee to
receive credit for a whole year of 'compensated service' by working a mere
seven days. There would be no distinction whatever between the man who
worked one day a month for seven months and the man who worked 365 days

in a year. The use of the label 'compensated service' cannot obscure the fact that
the real nature of these payments was compensation for loss of jobs. And the
cost to an employee of losing his job is not measured by how much work he did
in the pastno matter how calculatedbut by the rights and benefits he
forfeits by giving up his job. Among employees who worked at the same jobs
in the same craft and class the number and value of the rights and benefits
increase in proportion to the amount of seniority, and it is only natural that
those with the most seniority should receive the highest allowances since they
were giving up more rights and benefits than those with less seniority. The
requirements of the 1940 Act are not satisfied by giving returning veterans
seniority in some general abstract sense and then denying them the perquisites
and benefits that flow from it. We think it clear that the amount of these
allowances is just as much a perquisite of seniority as the more traditional
benefits such as work preference and order of lay-off and recall. We hold that
the failure to credit petitioners' 'compensated service' time with the period spent
in the armed services does not accord petitioners the right to be reinstated
'without loss of seniority' guaranteed by 8(b)(B) and (c).
8

What we have said makes it unnecessary to discuss in detail the Court of

Appeals' holding that these allowances did not come within the concepts of
'seniority, status, and pay' and thus were governed not by 8(b)(B) and the part
of 8(c) relating to seniority but rather by the clause in 8(c) stating that
returning veterans 'shall be entitled to participate in insurance or other benefits
offered by the employer pursuant to established rules and practices relating to
employees on furlough or leave of absence in effect with the employer at the
time such person was inducted into such forces * * *.' The Government
contends that the 'other benefits' clause of 8(c) was added to the bill 'for the
express purpose of entitling employees to receive, while in service, such
benefits as their employers accorded employees on leave of absence.' The
legislative history referred to in the Government's brief persuasively supports
such a purpose.3

This argument of the Governmentthat the 'insurance or other benefits' clause

was put in to provide these company benefits for the serviceman at the time he
was in the armed forcesalso finds some support in the fact that 8(c)
provides that the serviceman would be entitled to these benefits only if they
were 'in effect with the employer at the time such person was inducted into such
forces * * *.' Without attempting in this case to determine the exact scope of
this provision of 8(c) it is enough to say that we consider that it was intended
to add certain protections to the veteran and not to take away those which are
granted him by 8(b)(B) and the other clauses of 8(c).

10

Since the Court of Appeals held that the provisions of 8(b)(B) did not apply
to separation allowances it found it unnecessary to decide an alternative ground
which the railroad contended should cause reversal. That contention was that
since the agreement between the railroad and the union was entered into more
than one year after petitioners were restored to their employment, the Act has
no application to any rights created by the agreement. This argument rested on
that part of 8(c) which provides that a veteran who is restored to employment
'shall not be discharged from such position without cause within one year after
such restoration.' The District Court rejected the contention as having no merit.
We agree with the District Court and believe this contention to be so wholly
without merit that the case need not be remanded to the Court of Appeals for its
decision on the point. In Oakley v. Louisville & N.R. Co., 338 U.S. 278, 284,
70 S.Ct. 119, 94 L.Ed. 87, we said:

11

'(T)he expiration of the year did not terminate the veteran's right to the seniority
to which he was entitled by virtue of the Act's treatment of him as though he
had remained continuously in his civilian employment; nor did it open the door
to discrimination against him, as a veteran. * * * His seniority status * * *
continues beyond the first year of his reemployment * * *.'

12

What we said there governs this case. The District Court was correct in
rejecting this contention of the railroad.

13

In the Court of Appeals the railroad also contended that the District Court had
improperly computed the interest owing on the judgment awarded the
plaintiffs. Because of its holding that petitioners were entitled to no recovery at
all the Court of Appeals declined to decide the question of interest. The record
before us does not present that question with sufficient clarity for us to pass
upon it.

14

We affirm the judgment of the District Court holding that petitioners are
entitled to recover from the railroad the stipulated damages due them because
they are entitled to credit for the full amount of time served in the armed forces
in calculating their severance pay. But the cause is remanded to the Court of
Appeals for further consideration of the interest contention.

15

Reversed and remanded.

16

THE CHIEF JUSTICE took no part in the decision of this case.

54 Stat. 890, as amended, 50 U.S.C.App. 308 (1946 ed.). Section 8 of the

1940 Act is now 9 of the Universal Military Training and Service Act, 62
Stat. 614, as amended, 50 U.S.C.App. 459 (1964 ed.).

The Department of Justice is representing petitioners in this case pursuant to

8(e) of the 1940 Act.

Senator Sheppard in explaining an amendment which included the 'other

benefits' provision said:
'That amendment would make certain that all trainees would receive the same
insurance and other benefits as those who are on furlough or leave of absence
in private life. It seems to me to be a good suggestion.' 86 Cong.Rec. 10914.
And Congressman May, the Chairman of the House Committee on Military
Affairs, had this colloquy with another Congressman on the same question:
'Mr. MILLER. In reference to insurance, will that apply to group insurance?
Many industrial plants, of course, carry group insurance. Under those contracts
they continue their participation while a man is on vacation or on furlough.
Would they continue those policies in force?
'Mr. MAY. This would continue them in force and that is the very purpose of
the legislation.' 86 Cong.Rec. 11702.